Future of the Saudi Arabian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

  • ID: 4581068
  • Report
  • Region: Saudi Arabia
  • 142 Pages
  • Strategic Defence Intelligence
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FEATURED COMPANIES

  • Airbus Group
  • Al Salam Aircraft Company
  • BAE Systems Plc
  • Boeing
  • Lockheed Martin
  • Thales SA
  • MORE

Saudi Arabia is one of the largest defense spenders in the world, behind the US, China, and Russia, with a military budget valued at US$56 billion in 2018. The country is the largest market in the Middle East due to its robust economic and financial position, backed by its oil exports. The rising tension with Iran, aggressive procurement strategies, and modernization programs, along with the need to strengthen its indigenous defense industry, are the main factors boosting the country’s military expenditure.

Saudi Arabia was forced to cut back on defense spending in order to rationalize public expenditure and during 2015 the country’s defense spending declined by -29.6%. Although the country was expected to cut back on defense expenditure for 2016 and 2017, there were no cuts in spending, and during 2016 and 2017 Saudi defense and security expenditure cumulatively amounted to US$81.6 billion.

On the same time, Homeland security is an area that has gained prominence in Saudi Arabia over the last decade, with expenditure expected to increase 8 to US$41.7 billion in 2023 at a CAGR of 8.47%. After the Arab Spring revolution in the Middle Eastern and the North African (MENA) region, and minor protests in Riyadh, the country is expected to increase expenditure to enhance security measures. The spread of the extremist group, ISIS, in neighboring Syria coupled with the Houthi rebellion in adjoining Yemen, has forced Saudi Arabia to invest in securing its borders. As such, Saudi Arabia is investing in high technology border fencing along its boundaries with Iraq and Yemen.

As Saudi Arabia plans to source as much as 50% of its defense equipment from domestic defense companies in future and, in May 2017, the Saudi Arabian Public Investment Fund (PIF) decided to create a national defense industry company - Saudi Arabian Military Industries (SAMI) to cater to its domestic defense requirements. Many major defense companies, such as BAE Systems, EADS, General Dynamics, Thales, SAIC, and Northrop Grumman, have entered the Saudi Arabian defense market by forming alliances and joint ventures with domestic companies.

"Future of the Saudi Arabian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023", provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

Key Inclusions of the report are

  • Market opportunity and attractiveness: detailed analysis of the current industry size and growth expectations during 2019-2023, including highlights of the key growth stimulators
  • Procurement dynamics: trend analysis of imports and exports, together with their implications and impact on the Vietnamese defense industry
  • Industry structure: five forces analysis to identify various power centers in the industry and how these are expected to develop in the future
  • Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in Vietnam.
  • Business environment and country risk: a range of drivers at country level, assessing business environment and country risk.

Companies Mentioned: BAE Systems Plc, Airbus Group, General Dynamics Corporation, Lockheed Martin, Science Applications International Corporation (SAIC), Sikorsky Aircraft Corporation, Thales SA, Boeing, Northrop Grumman Corporation, Advanced Electronics Company (AEC) and Al Salam Aircraft Company

Scope

  • Saudi Arabia is one of the largest defense spenders in the world, behind the US, China, and Russia, with a military budget valued at US$56 billion in 2018. The country is the largest market in the Middle East due to its robust economic and financial position, backed by its oil exports. The rising tension with Iran, aggressive procurement strategies, and modernization programs, along with the need to strengthen its indigenous defense industry, are the main factors boosting the country’s military expenditure.
  • On a cumulative basis, the country is expected to invest US$326.5 billion for defense purposes, of which US$146 billion is earmarked for capital expenditure to fund defense procurements. The government’s well-defined military modernization plans along with its efforts to supress Houthi insurgency in Yemen as well as its support for rebel factions within Syria,  are expected to stimulate the expenditure over the next few years
  • The MoD is expected to invest in physical security of vital assets, development of land based C4ISR cpaabilities and multi-role aircraft among others.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Saudi Arabian defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Saudi Arabian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis,  Key Trends and Growth Stimulators, and latest industry contracts
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FEATURED COMPANIES

  • Airbus Group
  • Al Salam Aircraft Company
  • BAE Systems Plc
  • Boeing
  • Lockheed Martin
  • Thales SA
  • MORE

1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Ongoing procurement programs
3.1.6. Future procurement programs
3.1.7. Top Procurement Programs by Value (US$ Million) 2018-2023
3.1.8. Social, Political, and Economic Environment & Support for Defense Projects
3.1.9. Political & Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Saudi Arabian defense budget to grow at an estimated CAGR of 4.03% during 2019-2023
3.2.2. Strained relationship with Iran, military modernization programs, and the need to develop its indigenous defense sector are key factors driving defense expenditure
3.2.3. Saudi Arabian defense expenditure as a percentage of GDP is expected to average 8.1% during the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Majority of the budget to be allocated for revenue expenditure
3.3.2. Capital expenditure is anticipated to record a CAGR of 3.84% during the forecast period
3.3.3. Per capita defense expenditure is expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. The homeland security market in Saudi Arabia is expected to grow at a CAGR of 5.65% during the forecast period
3.4.2. Border Security and Infrastructure, along with cyber security will be the key factors driving homeland security
3.4.3. Saudi Arabia considered at ‘moderate risk’ of terrorist attack
3.4.4. Saudi Arabia faces high level of threat from foreign terrorist organizations
3.4.5. Saudi Arabia has a terrorism index score of 5.8
3.5. Benchmarking with Key Global Markets
3.5.1. Saudi Arabia is the third largest defense spender
3.5.2. Saudi Arabia is expected to remain among the top five defense spending countries in the world
3.5.3. Saudi Arabia spent over 7.5% of its GDP on defense in 2018
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Top 10 Defense Market Sectors by Value (US$ Million) - Projections over period 2018-2023
3.6.2. Critical Infrastructure Protection (CIP) - Physical Security
3.6.3. Land Based C4ISR
3.6.4. Fighters & Multi-Role Aircraft

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense industry heavily reliant on imports from foreign countries
4.1.2. The UK and the US are the key defense suppliers to Saudi Arabia
4.1.3. Aircraft to dominate Saudi Arabian defense imports
4.2. Export Market Dynamics
4.2.1. Saudi Arabia’s defense export market is negligible

5. Industry Dynamics
5.1. Five Forces Analysis
5.2. Bargaining power of supplier: Low to Medium
5.3. Bargaining power of buyer: Medium
5.4. Barrier to entry: Medium
5.5. Intensity of rivalry: Medium to High
5.6. Threat of substitution: High

6. Market Entry Strategy
6.1. Market Regulation
6.2. Defense industry remains closed to FDI
6.3. Offset Program to aid defense industry and economy
6.4. Market Entry Route
6.4.1. Budgeting Process
6.4.2. Procurement Policy and Process
6.4.3. A large number of foreign corporations enter the defense market by winning contracts
6.4.4. Collaborations and cooperative agreements provide market entry opportunities
6.4.5. GCC - an entry route to Saudi Arabian military market
6.5. Key Challenges
6.5.1. Bribery, corruption, and political affiliations
6.5.2. Scarcity of skilled Labor and Nitaqat law

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. Saudi Arabian defense sector is dominated by foreign competitors
7.1.2. Domestic participation in the Saudi Arabian defense industry is limited to two companies
7.2. Key Foreign Companies
7.2.1. BAE Systems Plc: overview
7.2.2. BAE Systems Plc: products and services
7.2.3. BAE Systems Plc: recent announcements and strategic initiatives
7.2.4. BAE Systems Plc: alliances
7.2.5. BAE Systems Plc: recent contract wins
7.2.6. BAE Systems Plc: financial analysis
7.2.7. Airbus Group: overview
7.2.8. Airbus Group: products
7.2.9. Airbus Group: recent announcement and strategic initiatives
7.2.10. Airbus Group: alliances
7.2.11. Airbus Group: recent contract wins
7.2.12. Airbus Group: financial analysis
7.2.13. General Dynamics Corporation: overview
7.2.14. General Dynamics Corporation: products and services
7.2.15. General Dynamics Corporation: alliances
7.2.16. General Dynamics Corporation: recent contract wins
7.2.17. Lockheed Martin: overview
7.2.18. Lockheed Martin: products
7.2.19. Lockheed Martin: recent announcements and strategic initiatives
7.2.20. Lockheed Martin: alliances
7.2.21. Lockheed Martin: recent contract wins
7.2.22. Lockheed Martin: Financial Analysis
7.2.23. Science Applications International Corporation: overview
7.2.24. Science Applications International Corporation: products
7.2.25. Science Application International Corp. (SAIC): recent contracts and strategic initiatives
7.2.26. Science Applications International Corporation: alliances
7.2.27. Science Applications International Corporation: recent contract wins
7.2.28. Sikorsky Aircraft Corporation: overview
7.2.29. Sikorsky Aircraft Corporation: products
7.2.30. Sikorsky Aircraft Corporation: recent announcements and strategic initiatives
7.2.31. Sikorsky Aircraft Corporation: alliances
7.2.32. Sikorsky Aircraft Corporation: recent contract wins
7.2.33. Thales: overview
7.2.34. Thales: products
7.2.35. Thales: recent announcements and strategic initiatives
7.2.36. Thales: alliances
7.2.37. Thales: recent contract wins
7.2.38. Thales: Financial Analysis
7.2.39. Boeing: overview
7.2.40. Boeing: products and services
7.2.41. Boeing: recent announcements and strategic initiatives
7.2.42. Boeing: alliances
7.2.43. Boeing: recent contract wins
7.2.44. Boeing: Financial Analysis
7.2.45. Northrop Grumman Corporation: overview
7.2.46. Northrop Grumman Corporation: products
7.2.47. Northrop Grumman Corporation: recent announcements and strategic initiatives
7.2.48. Northrop Grumman Corporation: alliances
7.2.49. Northrop Grumman Corporation: recent contract wins
7.2.50. Northrop Grumman: Financial Analysis
7.3. Key Domestic Companies
7.3.1. Advanced Electronics Company: overview
7.3.2. Advanced Electronics Company: services
7.3.3. Advanced Electronics Company: recent announcements and strategic initiatives
7.3.4. Advanced Electronics Company: alliances
7.3.5. Advanced Electronics Company: recent contract wins
7.3.6. Al Salam Aircraft Company: overview
7.3.7. Al Salam Aircraft Company: products and services
7.3.8. Al Salam Aircraft Company: alliances
7.3.9. Al Salam Aircraft Company: recent contract wins

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP per Capita
8.1.2. Gross Domestic Product
8.1.3. Exports of goods and services LCU Bn
8.1.4. Imports of goods and services, LCU Bn
8.1.5. Gross National Disposable Income
8.1.6. Market Capitalization of listed companies (US$ Billion)
8.1.7. Market Capitalization of listed companies (as a % of GDP)
8.1.8. Goods Exports as a % of GDP
8.1.9. Goods Imports as a % of GDP
8.1.10. Services Imports as a % of GDP
8.1.11. Services Exports as a % of GDP
8.1.12. Net Foreign Direct Investment (current US$ Bn)
8.1.13. Net FDI as a % of GDP
8.1.14. Mining, Manufacturing, Utilities Output (LCU Bn)

9. Appendix

List of Tables:
Table 1: The Saudi Arabian Land Forces Strength (Including National Guard)
Table 2: Saudi Arabian Navy Strength
Table 3: Saudi Arabia Air Force Strength
Table 4: Saudi Arabian - Ongoing Development and Procurement Programs
Table 5: Saudi Arabian - Future Procurement Programs*
Table 6: Top Saudi Arabian Defense Procurement Programs by Value (US$ Million) 2018-2023
Table 7: Saudi Arabian Defense Expenditure (SAR Billion and US$ Billion), 2014-2023
Table 8: Saudi Arabia GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2014-2023
Table 9: Saudi Arabia Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 10: Saudi Arabia Defense Capital Expenditure (SAR billion and US$ billion), 2014-2023
Table 11: Saudi Arabian Per-Capita Defense Expenditure (US$), 2014-2023
Table 12: Saudi Arabian Homeland Security Expenditure (SAR billion & US$ billion), 2014-2023
Table 13: Terrorism Index, 2018
Table 14: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 15: Top Saudi Arabian Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 16: Saudi Arabia - Offset Guidelines and Agreements
Table 17: Saudi Arabian Budget Formation Timetable
Table 18: Market Entry by Key Foreign Competitors
Table 19: Top Defense Suppliers in The Saudi Arabian Defense Industry - By Value (US$ Million) 2018-2023
Table 20: Competitive Landscape of the Saudi Arabian Defense Industry
Table 21: BAE Systems Plc. - Product Focus
Table 22: BAE Systems Plc. - Alliances
Table 23: BAE Systems Plc. - Recent Contract Wins
Table 24: Airbus Group - Product Focus
Table 25: Airbus Group- Alliances
Table 26: Airbus Group- Recent Contract Wins
Table 27: General Dynamics Corporation - Product Focus
Table 28: General Dynamics Corporation - Alliances
Table 29: General Dynamics Corporation - Recent Contract Wins
Table 30: Lockheed Martin - Product Focus
Table 31: Lockheed Martin - Alliances
Table 32: Lockheed Martin - Recent Contract Wins
Table 33: Science Application International Corp. (SAIC) - Product Focus
Table 34: Science Applications International Corporation - Alliances
Table 35: Science Applications International Corporation - Recent Contract Wins
Table 36: Sikorsky Aircraft Corporation - Product Focus
Table 37: Sikorsky Aircraft Corporation - Alliances
Table 38: Sikorsky Aircraft Corporation - Recent Contract Wins
Table 39: Thales - Product Focus
Table 40: Thales - Alliances
Table 41: Thales - Recent Contract Wins
Table 42: Boeing - Product Focus
Table 43: Boeing - Alliances
Table 44: Boeing - Recent Contract Wins
Table 45: Northrop Grumman - Product Focus
Table 46: Northrop Grumman Corporation - Alliances
Table 47: Northrop Grumman Corporation - Recent Contract Wins
Table 48: Advanced Electronics Company - Product Focus
Table 49: Advanced Electronics Company - Alliances
Table 50: Advanced Electronics Company - Recent Contract Wins
Table 51: Al Salam Aircraft Company - product focus
Table 52: Al Salam Aircraft Company - Alliances
Table 53: Al Salam Aircraft Company - Recent Contract Wins

List of Figures:
Figure 1: Saudi Arabian Defense Expenditure (SAR Billion), 2014-2023
Figure 2: Saudi Arabian Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Saudi Arabian GDP Growth vs. Defense Expenditures Percentage of GDP Growth, 2014-2023
Figure 4:Saudi Arabian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Saudi Arabian Capital Expenditure (in SAR Billion), 2014-2023
Figure 6: Saudi Arabian Defense Capital Expenditure (US$ Billion), 2014-2023
Figure 7: Saudi Arabian Per Capita Defense Expenditure (US$), 2014-2023
Figure 8: Saudi Arabian Homeland Security Expenditure (SAR Billion), 2014-2023
Figure 9: Saudi Arabian Homeland Security Expenditure (US$ billion), 2014-2023
Figure 10: Terrorism Heat Map, 2018
Figure 11: Terrorism Index, 2018
Figure 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2018
Figure 15: Critical Infrastructure Protection Market Size (US$ Million), 2018-2023
Figure 16: Land Based C4ISR Market Size (US$ Million), 2018-2023
Figure 17: Fighters & Multi-Role Aircraft Market Size (US$ Million), 2013-2023
Figure 18: Top Saudi Arabian Defense Procurements in Terms of Their Supplier Relationships
Figure 19: Saudi Arabian Defense Import Trend, 2013-2017 (TIV values)
Figure 20: Saudi Arabian Defense Imports by Country (%), 2013-2017
Figure 21: Saudi Arabian Defense Imports by Weapon Category (%), 2013-2017
Figure 22: Industry Dynamics - Porter’s Five Forces Analysis
Figure 23: Saudi Arabia - Military Chain of Command
Figure 24: BAE Systems - Revenue Trend Analysis (GBP Billion), 2013-2017
Figure 25: BAE Systems - Operating Profit Trend Analysis (GBP Billion), 2013-2017
Figure 26: BAE Systems - Net Profit Trend Analysis (GBP billion), 2013-2017
Figure 27: Airbus Group - Revenue Trend Analysis (EUR Billion), 2013-2017
Figure 28: Airbus Group - Operating Profit Trend Analysis (EUR Billion), 2013-2017
Figure 29: Airbus Group - Net Profit Trend Analysis (EUR Billion), 2013-2017
Figure 30: Lockheed Martin - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 31: Lockheed Martin - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 32: Lockheed Martin - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 33: Thales - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 34: Thales - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 35: Thales- Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 36: Boeing - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 37: Boeing - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 38: Boeing - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 39: Northrop Grumman - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 40: Northrop Grumman - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 41: Northrop Grumman - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 42: Saudi Arabian GDP per Capita (US$), 2015-2025
Figure 43: Saudi Arabian GDP (current US$ bn), 2015-2025
Figure 44: Saudi Arabian Exports of goods and services (current LCU Bn), 2005-2014
Figure 45: Saudi Arabian Imports of goods and services (current LCU Bn), 2005-2014
Figure 46: Saudi Arabian Gross National disposable income (US$ Bn), 2005-2014
Figure 47: Saudi Arabian Market Capitalization of listed companies (US$ Billion), 2005-2012
Figure 48: Saudi Arabian Market Capitalization of listed companies (as a % of GDP), 2005-2012
Figure 49: Saudi Arabian Goods exports as a % of GDP, 2005-2014
Figure 50: Saudi Arabian Goods Imports as a % of GDP, 2005-2014
Figure 51: Saudi Arabian Services Imports as a % of GDP, 2005-2014
Figure 52: Saudi Services Exports as a % of GDP, 2005-2014
Figure 53: Saudi Arabian net Foreign Direct Investment (current US$ Bn), 2005-2014
Figure 54: Saudi Arabian Net FDI as a % of GDP, 2005-2014
Figure 55: Saudi Arabian Mining, Manufacturing, Utilities Output (LCU Bn), 2005-2014

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  • BAE Systems Plc
  • Airbus Group
  • General Dynamics Corporation
  • Lockheed Martin
  • Science Applications International Corporation (SAIC)
  • Sikorsky Aircraft Corporation
  • Thales SA
  • Boeing
  • Northrop Grumman Corporation
  • Advanced Electronics Company (AEC)
  • Al Salam Aircraft Company
Note: Product cover images may vary from those shown
5 of 5
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